In May of 2014 the Financial Accounting Standards Board (FASB) issued the long-awaited Accounting Standards Update, Revenue from Contracts with Customers. The changes go into effect for public companies for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The deadline for non-public entities is one year later.
This new standard replaces virtually all U.S. GAAP guidance that currently exists on revenue recognition with a single model to be applied to all contracts with customers. The new standard provides for a significant amount of judgment and added complexity, as it moves to a principles-based approach instead of providing a series of rules that apply in different scenarios.
Public and private companies need to become familiar with the new standard and then determine if their accounting policies and systems need to be changed to reflect the new standard.
To help you get started on this transition, Frazier & Deeter has developed a two-part series of videos that examine the the specifics of the new standard and the steps to take to adopt the new standard.
Revenue Recognition Part 1 - Updated Guidance
Revenue Recognition Part 2 - Adoption Process